Secretary of Commerce Gary Locke
Remarks at U.S.-UAE Business Council Luncheon
Washington, D.C.

Good afternoon. Thank you, Myron, for the introduction, and thank you, Danny, for the invitation to be here with you today to address this distinguished crowd.

Over the last few years, the bonds of trust between the United States and the United Arab Emirates (U.S.-UAE) have grown strong—thanks in large part to the efforts of organizations like the U.S. Chamber and the U.S.–UAE Business Council to foster dialogue and increase the commercial and trade ties that deliver so many mutual benefits to our people.

Thank you for your great work.

I know there is a wide range of businesses represented here today. Many of you already have operations in the Middle East and in the UAE in particular, and many of you are continuing to explore new business opportunities.

And I hope you will keep expanding your activities in the Middle East. Because it’s good for America and it’s good for the Middle East.

You may not think of yourselves as diplomats, but you carry out a role that no government agency can.

By demonstrating the unrivaled quality of American entrepreneurship and American values on a day-to-day basis, with your counterparts in the UAE and the Middle East as a whole, you are showcasing the very best that America has to offer.

Opportunities for American companies in the UAE are many and diverse.

Amid all the troubling economic news of the last year, there is good news when it comes to the U.S.-UAE trade relationship. The UAE ranked as our 18th-largest export market worldwide through June 2009, and was the largest U.S. export destination in the Middle East.

In the first half of 2009, of America’s top 25 export markets, exports declined to all but one. The UAE stands alone as the only top-25 U.S. export market to which U.S. exports actually grew.

This fact underscores the increasing importance of the United States’ commercial relationship with the UAE.

But increased trade is only one facet of a very deep relationship. The UAE is a strong regional ally with whom we have a mutually beneficial political, security, and economic relationship. The UAE is a valued partner on many important issues, and its cooperation is vital as we deal with issues related to Pakistan, the Palestinian Authority, Afghanistan, Iraq and Iran.

It is my hope that our partnership will soon include expanded cooperation in the civil nuclear arena.

As you know, on May 21st, President Obama submitted to Congress the U.S.-UAE 123 Agreement for Peaceful Nuclear Cooperation. The 123 Agreement states the parameters for the transfer of U.S. civilian nuclear technology, material, equipment, and components that the UAE will need to construct its own nuclear power plants.

Most immediately, this Agreement is necessary to allow U.S. companies to participate in the nuclear power generation initiative for which the UAE is in the process of selecting contractors.

The Department of Commerce wholeheartedly supports this agreement, and I believe it has tremendous potential to benefit U.S. firms and to create jobs.

The development of a civil nuclear power plant is an immense task that requires expertise and contributions in areas where U.S. companies have proven track- records. We anticipate significant opportunities for U.S. participation at all levels of this effort and I am pleased that there are so many firms that can contribute represented here today. Building a set of civil nuclear reactors from scratch will require the best project managers, logistics firms, engineering design firms, construction companies, specialty equipment manufacturers, fuel service providers, and more.

In short, it will require American know-how, American ingenuity and American tenacity, all qualities that each of you have in abundance.

We have heard some ask why a relatively oil-rich country like the UAE would have an interest in alternative sources of energy.

The answer is that the UAE is a leader in many regards. And like many countries in the world, including the United States, the UAE understands the potential of alternative sources of energy. It is proactively pursuing innovative ways to meet its future needs.

While the UAE has enjoyed robust economic growth in recent years, this expansion has been accompanied by a significant increase in energy demand. According to the World Nuclear Association, the UAE currently has the capacity to produce about 18,000 megawatts of electricity, primarily from natural gas. With electricity demand increasing by about 9 percent a year, the UAE is expected to need about 40,000 megawatts by 2020, more than double its current generation capacity.

To meet this demand, the UAE has laid out a bold strategy for constructing nuclear reactors to provide low-cost electricity with negligible carbon emissions.

The UAE is building the infrastructure needed to responsibly construct nuclear power plants, and is working to set up the institutions that will oversee their operation and regulation, including the Emirates Nuclear Energy Corporation and the Federal Authority for Nuclear Regulation. I am pleased that U.S. companies have already been involved in the initial phases of nuclear power planning and infrastructure development—but the future potential is even greater.

I urge you to seek out opportunities in the development of the UAE’s civil nuclear infrastructure to ensure that a large contingent of U.S. firms contribute to this historic project. And know this: The U.S. Government stands firmly behind you in this endeavor.

I know there have been concerns in some quarters about the sharing of nuclear know-how—but the American people can be confident that our partners in the UAE have demonstrated a serious commitment to the highest standards of nuclear safety, security and nonproliferation.

This 123 Agreement incorporates the UAE’s decision to forgo the use of enrichment and reprocessing technologies and activities within its territory, and to instead manage its nuclear fuel needs through the international market. This type of commitment is the first of its kind to appear in one of our 123 Agreements.

Furthermore, the United States and the UAE have agreed that no transfers of nuclear-related supplies or material will be made before the UAE's Additional Protocol goes into effect.

The Additional Protocol—which the United States strongly endorses—provides the International Atomic Energy Agency with additional tools to ensure that all nuclear activities within a state are “strictly peaceful.”

The UAE has already acceded to the Nuclear Non-Proliferation Treaty, which provides parties the right to responsibly pursue civil nuclear energy. The UAE has also agreed to enter into the Convention on Nuclear Safety, the Joint Convention on the Safety of Spent Fuel Management and Radioactive Waste Management, and the Convention on the Physical Protection of Nuclear Material.

Let me also note that the United States continues to work closely with the UAE on its implementation of a robust export control system.

The pending 123 Agreement is yet another example of the strong partnership between the United States and the UAE. But it is also a tangible expression of the United States’ desire to cooperate with states in the Middle East, and elsewhere, in the safe and secure development of peaceful nuclear power.

When President Obama spoke in Cairo this past June, he said that we have a responsibility to join together on behalf of the world that we seek—a world where extremists no longer threaten our people, and where nuclear energy is used for peaceful purposes. Those are mutual interests that we can only achieve together.

The 123 Agreement with the UAE has the potential to serve as a model for other countries in the region that wish to pursue responsible nuclear energy development.

And as the peaceful use of nuclear power expands, the Department of Commerce is ready to help U.S. companies bring their resources to bear around the world.

To help the U.S. nuclear industry rebuild its manufacturing base and capture opportunities abroad, the Department of Commerce has launched a comprehensive Civil Nuclear Trade Initiative. The initiative has four major components: an interagency civil nuclear working group under the Trade Promotion Coordinating Committee; the creation of an industry advisory committee; promoting activities like trade missions and, industry events; and finally outreach and resources, like our new online Civil Nuclear Exporters Guide, designed to help companies navigate the often-complex nuclear licensing process.

I’d also like to highlight one other activity that is taking place under our Civil Nuclear Trade initiative. We are organizing our second annual industry program from September 13-15, in Vienna, Austria at this year’s International Atomic Energy Agency General Conference. The primary objective of this program is to demonstrate the Department’s support for American industry participating in the global expansion of nuclear power. The event will also serve as a venue for U.S. industry to showcase innovative technologies and services, to meet key foreign decision makers, and to actively participate in a policymaker roundtable with several U.S. government agencies.

I hope many of you are planning to attend.

There is so much commercial promise in the expansion of peaceful nuclear power—and U.S. companies need to be front and center.

The 123 Agreement is groundbreaking and historic, but it does not guarantee U.S. commercial participation. As U.S. firms, I urge you, once again, to explore opportunities affiliated with this project. The Department of Commerce commercial staff, led by Laurie Farris and Bob Dunn in Abu Dhabi and Dubai, is prepared to help you, as is the Office of Energy and Environmental Industries at the main Commerce building. Please reach out to these entities as well as our hosts, the U.S.-UAE Business Council as we move forward.